Waiting for offers

Michel Marto, Jordan’s Minister of Finance, is the man tasked with spearheading the country’s privatisation drive. He explains what’s for sale, when and how much he hopes to raise.

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By  David Ingham Published  February 25, 2003

|~||~||~|After Jordan Telecom Company, which companies are next in line for privatisation?

We are working on three things: the energy sector, phosphate and potash.

What is your timeframe?

We’re working on it for this year but it is very hard under the circumstances to put dates. At the moment, people are not travelling here as much and are not getting in touch; we have important missions and people don’t turn up. They are afraid to come to the region; they want to wait and see how things develop and so on.

Have you decided on the privatisation method: IPO, private equity sale or BOOT?

For potash and phosphate, it’s going to be a private equity sale. These two are already on the [stock] market. What we want to sell is part of the holding of the government. What we’re trying to do in energy is get a strategic partner.

Would that be a similar arrangement to Jordan Telecom with a minority foreign partner taking management control?


As you look at the privatisation candidates, do they need restructuring or has that been done?

Yes, yes, they are ready.

So job cuts have been made and products are being sold at market rates?

Oh yes, yes, that is all ready.

So it’s a case of waiting now for bids?

Some developments are taking place. There are interested parties. There are serious negotiations.

In July [2002], you had a target of JD500 million in privatisation proceeds in the next two years. Are you sticking to that?

It’s not easy for me to say right now, but we’re still thinking in those terms.

What are you doing with the proceeds? Are you creating a fund for entrepreneurs, as has been rumoured?

No, no, there is no such thing. The only thing we have in the Jordan Fund is $20 million. The money is for the treasury account to cut down debt. This money is not to be spread around.

Do the privatisation candidates carry much debt?

Everything is in the price. For example, potash, is not an indebted company. I think they have deposits in the bank. Phosphate has some debt, but it’s the normal debt that a mining company would carry. Power carries the normal loans that a power company has.

It all depends whether we pay off the debt and sell it without debt. Actually, what was requested is that the power company should be more indebted. It was said that the company should issue more debt instead of less debt.

Will the power sector be free to set its own tariffs?

No, these are regulated industries. In electricity, there will be a formula and regulation. Nobody is free, this is a monopoly; there is only one electricity monopoly. You do these things with an equation and formula.

But enough to make a good profit?

Yes, otherwise people will not come. They look for a return on their money. But if they are more efficient, they make more money. If they are less efficient, they make less money.

What are you going to do with the rest of your stake in Jordan Telecom Company?

We’ll see how developments are and we’ll decide when to sell more if we want to sell more. We’re not in any hurry. Jordan has large foreign exchange reserves, we have done the IPO, [and] we have a strategic partner with 40%, so there is no need to rush things. But, once things improve in the area, maybe we’ll sell some more.||**||

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